Insi Ltd manufactures product J7524G and provides the following information for the last month: Budgeted figures: Variable manufacturing overheads R20 000 Fixed manufacturing overheads R48 000 Labour hours 4 000 Expected production 1 000 units Actual results: Variable manufacturing overheads R19 135 Fixed manufacturing overheads R49 880 Labour hours worked 4 300 Actual production 1 050 units Calculate the following fixed manufacturing overhead overheads variances (in Rands) and state if they are favourable or unfavourable: 2.1 Expenditure variance 2.2 Volume variance 2.3 Total fixed overheads variance
Insi Ltd manufactures product J7524G and provides the following information for the last month: Budgeted figures: Variable manufacturing overheads R20 000 Fixed manufacturing overheads R48 000 Labour hours 4 000 Expected production 1 000 units Actual results: Variable manufacturing overheads R19 135 Fixed manufacturing overheads R49 880 Labour hours worked 4 300 Actual production 1 050 units Calculate the following fixed manufacturing overhead overheads variances (in Rands) and state if they are favourable or unfavourable: 2.1 Expenditure variance 2.2 Volume variance 2.3 Total fixed overheads variance
Chapter1: Financial Statements And Business Decisions
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Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:Insi Ltd manufactures product J7524G and
provides the following information for the
last month:
Budgeted figures:
Variable manufacturing overheads R20
000
Fixed manufacturing overheads R48 000
Labour hours 4 000
Expected production 1 000 units
Actual results:
Variable manufacturing overheads R19 135
Fixed manufacturing overheads R49 880
Labour hours worked 4 300
Actual production 1 050 units
Calculate the following fixed
manufacturing overhead overheads
variances (in Rands) and state if they are
favourable or unfavourable:
2.1 Expenditure variance
2.2 Volume variance
2.3 Total fixed overheads variance
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